Small sequester cuts in EPA grant program mean big headache for state regulators

This story was updated at 1:47 p.m. EDT with EPA response.

At a glance, U.S. EPA's plan to cut an $11.5 million grant program in an effort to meet the sequestration mandate doesn't look like much given the agency's $8.5 billion budget.

But that's a lot of money to state and local air regulators who have been counting on it.

"In addition to all of the cuts the states have sustained the last couple of years because of horrific economic conditions at the local level, we are now facing a double whammy of having cuts in federal grants to states on top of those already cut state and local programs," said Bill Becker, executive director of the National Association of Clean Air Agencies, or NACAA.


"This is not the first cut they're experiencing, and it likely won't be the last. And as these accumulate, it becomes more and more problematic."

In most years, EPA provides about $230 million to help states and local governments meet Clean Air Act responsibilities. But sequestration is changing that equation, forcing agencies to absorb a 5 percent cut in annual grants over the final six months of fiscal 2013.

And cuts come on a base line that's already lower than the Clean Air Act envisioned, Becker said. Section 105 of that law authorized EPA to provide up to 60 percent of a state's cost of running air programs. While that section provides funds for specialized air monitoring that the states are not required to match, NACAA estimates that states usually cover 77 percent of their own budgets, with EPA chipping in 23 percent.

Those funds "are our bloodline," Becker said.

"Significant cuts to that program," he added, "could very well interfere with our ability to protect people's lives and health."

EPA hasn't committed to a strategy for cutting $11.5 million from the grant program. The agency said it does not have an approved operating plan for fiscal 2013, so it cannot compare funding levels at this time.

But Becker said EPA plans to meet $4 million of the total by delaying the next phase of a new monitoring program for nitrogen oxides at busy highways.

Pushing the program back a year may have consequences, Becker said, notably that people living in smoggy areas would still not have access to information about highway NOx emissions. The monitoring has been the subject of litigation in California.

EPA, Becker said, has also indicated it plans to distribute the remaining $7.5 million in grant-program cuts among state agencies and allow them to figure out how to make those reductions.

"I don't think in any state the impacts will be benign," he said. But some states, he said, would see monitoring, enforcement and other operations hampered more by the drawdown in federal funds than others would.

Bruce Andersen, who heads the Department of Air Quality for the Unified Government of Wyandotte County in northeast Kansas, said his agency would probably have to lose staff as a result of the cuts to grants. He has six staffers, down from 10 in recent years because of local budget woes. The agency processes Clean Air Act permits, oversees monitoring and does pollution enforcement in the busy Kansas City industrial sector.

"It's an environment where the money just hasn't been increasing. It's been stable at best and sometimes decreasing a little bit," he said in a telephone interview. "And our work responsibilities don't decrease commensurately. They tend to keep increasing over time."

As the economy picks up and the spring building season starts, Andersen's small office expects to see a steady rise in applications from businesses that need new or revised air permits. His agency's two permit engineers -- half as many as the office had a few years ago -- are already taking about a third more time than they did two years ago to grapple with their current workload. More work will mean longer waits.

"They have to wait in line if your staff is down," he said.

'Fewer cops on the beat'

In some cases, tight funding has required local agencies like his own to close, transferring responsibility for enforcement, permitting and other activities to state agencies.

And if states lack the resources to carry out those responsibilities, they revert back to EPA.

Bottom line: There are fewer regulators with boots-on-the-ground experience with local businesses.

"Suddenly, EPA then has to scramble with existing resources and staff to become the major permit writer, the major faculties inspector," said Peter Iwanowicz, who works on national policy and advocacy at the American Lung Association.

Businesses don't want to see that happen, Andersen said.

"They would much rather work with local [air agencies] and even the states than they would with, say, the federal EPA if they were to take over the permitting program," he said.

Air agencies collect a small amount of funding by charging large emission sources fees to process permit applications, but Becker said those fees account for only about 10 percent of an agency's operating expenses.

A few states supplement permit fees with additional levies, but Andersen said these policies wouldn't gain traction in business-friendly Kansas.

A few industry groups say they are looking at how EPA budget constraints might affect their members' ability to get permits.

"Yes, we are concerned that budget issues could cause permitting delays and/or increase uncertainty around our construction or expansion projects, and could take some of the steam out of the manufacturing renaissance being driven by new shale gas supplies," American Chemistry Council spokeswoman Jennifer Scott said in an email.

Shale production is a relatively new industry, and new projects will all require permits for construction and operation.

"To ensure they go forward, businesses need certainty, including timely permitting by the [EPA] and state agencies," she said. "Unfortunately, sequestration, staff furloughs, and budget cuts could adversely affect the permitting timeline."

Cuts to state air grants will also be detrimental, she said. "Cutting these funds could result in shortages of permitting staff and/or higher permit fees, both of which hurt the very businesses that are trying to generate economic growth," she wrote.

Paul Billings, the American Lung Association's senior vice president, said permitting delays grow over time.

"You have to have enough human resources within a state air agency to process those permit applications, and so if you have fewer people, it's going to take longer, and it sort of cascades," he said. "If the turnaround time is a week and then it stretches to two weeks, then it gets longer as we go."

But the bottom line for Iwanowicz is that less resources for state and local regulators will lead to more emissions.

"Our concern," he said, "is that fewer resources mean fewer cops on the beat."

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